Consider Consumption in Two Periods $c _ { 1 }$ And $c _ { 2 }$

question 66

Multiple Choice

Consider consumption in two periods, $c _ { 1 }$ and $c _ { 2 }$ . Consumption smoothing implies:

• A) if taxes fall today, they will rise tomorrow
• B) people would consume \(c _ { 1 } = c _ { 2 }\)
• C) people would rather consume the average of \(c _ { 1 }\) and \(c _ { 2 }\)
• D) transitory income is zero
• E) people always know their future incomes and adjust consumption accordingly

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Definitions:

Impatient

A feeling of restlessness or desire for immediate action or results, often leading to frustration when delays occur.

Ambitious

Having a strong desire and determination to achieve success or accomplish a specific goal.

Hardy

Showing resilience and ability to cope well with life's challenges.

Stress Relievers

Activities or practices that reduce stress and promote relaxation, such as exercise, meditation, or hobbies.